German 2013 Power Falls to Record as Brent Oil, Carbon Decline

German power for 2013 slumped to a record after Brent crude declined as Republican leaders in the U.S. scrapped a plan to allow higher taxes. European Union carbon permits also fell.

German 2013 baseload electricity, for supplies delivered around the clock, slid as much as 0.3 percent as crude dropped 1 percent and emissions lost 1.6 percent. Traders consider crude prices when buying and selling long-term power contracts.

Power for 2013, a European benchmark, declined as much as 15 cents to 45 euros ($59.46) a megawatt-hour, a record for the contract and the lowest price for year-ahead electricity since December 2009, according to broker data compiled by Bloomberg. Today is the final day of trading for the 2013 power contract on the European Energy Exchange AG before it expires.

Brent for February settlement fell as much as $1.45 to $108.75 a barrel on the London-based ICE Futures Europe exchange. Carbon for 2013 lost 12 cents to 7.26 euros a metric ton on ICE Futures Europe. Electricity in Europe’s largest economy can track emissions prices, which affect production costs at plants which burn fossil fuels.

U.S. House Speaker John Boehner, a Republican, scrapped a plan to allow higher tax rates on annual incomes above $1 million, yielding to resistance from party colleagues. Talks between Boehner and President Barack Obama are already stalled with 10 days to go before the year-end deadline for a budget compromise.

Next-week power in France and Germany, Europe’s two biggest power markets slumped to records. German next-week electricity fell 9.9 percent to 23.20 euros a megawatt-hour while the French contract dropped 19 percent to 17 euros, broker data compiled by Bloomberg since 2007 show.

The maximum temperature in Frankfurt on Dec. 24 will be 10 degrees Celsius (50 Fahrenheit) tomorrow versus a five-year average of 2 degrees, CustomWeather Inc. data show.

Day-ahead power fell 48 percent to 22 euros ahead of holidays in Germany. The January contract lost 0.5 percent to 47.25 euros a megawatt-hour, broker data show.

To contact the reporter on this story: Rachel Morison in London at rmorison@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net

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